According to data released by HDB, prices of resale HDB flats increased by 2.6% in the fourth quarter of 2024, making it the 19th consecutive quarter of price growth in the resale market. This brings the overall price increase to 9.7% for the whole of 2024. The yearly increase in prices last year was nearly double the 4.9% increase recorded in 2023.
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The rise in resale prices in the previous quarter was slightly lower when compared to the 2.7% increase in the third quarter. According to Mohan Sandrasegeran, head of research & data analytics at SRI, the strong price growth in 2024 can largely be attributed to the limited supply of flats reaching their Minimum Occupation Period (MOP) during the year.
Sandrasegeran added that the limited supply caused prices to be pushed up, especially for newer flats and larger flat types like five-room and executive units, which cater to growing family needs.
Among the different flat types in the HDB resale market, five-room flats registered the highest price growth in the fourth quarter of 2024. The average resale price for five-room flats jumped 2.2% to $754,097. Meanwhile, four-room flat prices increased 2.2% to $652,544 in the same quarter.
The Central Area saw the highest price increase at 25.6% in the fourth quarter, followed by Toa Payoh at 12.1%, Tampines at 6.9%, Bishan at 6.7%, and Bedok at 6.1%. HDB resale flats worth over $1 million also saw an increase in transactions, with 285 units sold in the last three months of 2024. This brings the total number of million-dollar resale transactions to 1,035 for the whole of 2024.
According to Lee Sze Teck, senior director of data analytics at Huttons Asia, over 90% of these transactions occurred in mature estates, with the Kallang/Whampoa estate recording the highest number of sales at 156 units, followed by Toa Payoh at 144 units, and Bukit Merah at 135 units.
However, the transaction volume in the resale market experienced a downturn of 21.1% in the fourth quarter, falling from 8,142 units sold in the third quarter to 6,424 units. Lee attributed this to seasonal factors such as the year-end holiday and festive season. He added that the lower interest rate environment may have also encouraged some buyers to move to the private residential market or the Executive Condominium (EC) market.
Additionally, some prospective buyers may have chosen to ballot for a flat in the latest Build-to-Order (BTO) sales exercise, which was held in October 2024. The exercise saw HDB launch a record 15 projects comprising 8,573 flats under the new location-based classification framework. This was the first time singles were also allowed to buy two-room flexi BTO flats in all locations.
Despite the fall in transaction volume in the fourth quarter, the overall resale transactions in 2024 showed an increase of 8.4% from 26,735 units sold in 2023 to 28,986 units sold. This marks the highest number of resale transactions since 2021 when 31,017 flats were sold.
Based on transaction data compiled by Huttons Asia, the top five most popular HDB towns among buyers in 2024 were Sengkang, Woodlands, Punggol, Tampines, and Yishun. These areas accounted for around 35.9% of all HDB resales in 2024.
Looking ahead, around 6,976 flats are expected to reach the end of their MOP this year, which is a 41.6% decrease from the 11,952 flats in 2024. Sandrasegeran attributed this to the relatively fewer BTO flats completed in 2020 during the Covid-19 pandemic.
However, HDB has announced plans to launch over 25,000 new flats across three BTO sales exercises in 2025, comprising 19,600 BTO flats and more than 5,500 flats under the Sale of Balance Flats (SBF) exercise. The next SBF exercise will take place concurrently with the upcoming BTO sales exercise in February, where 5,000 BTO flats in Kallang/Whampoa, Queenstown, Woodlands, and Yishun will be offered.
This will be the largest SBF exercise held since November 2020 when 5,220 units were made available. Sandrasegeran noted that 4 out of 10 of the 5,500 SBF flats that will be offered next month are already completed.
Sandrasegeran said that the large increase in public housing supply aims to address the growing demand for housing, particularly in mature estates where resale flats are highly sought after. He added that SBF flats are more appealing to home seekers who value the option of acquiring a brand-new, ready-to-move-in flat with a shorter waiting time compared to the typical BTO process.
Furthermore, about 3,800 units of the 19,600 BTO flats planned for launch in 2025 will be designated as Shorter Waiting Time (SWT) flats, offering wait times of less than three years.
Sandrasegeran projected resale prices in the HDB market for 2025 to increase by 3.5% to 5.5%, with resale transaction volume ranging between 26,000 and 27,000. However, Lee from Huttons Asia projected a more optimistic price increase of between 5% to 8% across the year.